Palm and Microsoft: Once competitors, now partners

TORONTO – Palm on Wednesday said that with the launch of its latest smart phone, the Treo 700wx, it wants to provide business customers with more choice: either the Palm or Microsoft OS.

Previous Palm devices, such as the Treo 650 smart phone runs on the Palm OS alone. Palm said it will also launch three new products before the end of the year — and it will launch with multiple carriers in Canada. While the Treo 700wx is now available on Bell’s high-speed mobile network, 1xEv-DO, Telus should be on board within the next couple of weeks. Palm also has plans to bridge the gap between business and consumer products, said Michael Moskowitz, vice-president of Americas International with Palm Inc.

“Differentiation is absolutely key,” he said. “The next step for us is expanding the addressable market.” Palm will attempt to replicate its business strategy outside of the U.S. and partner with global operators, including Bell and Telus in Canada. Where Microsoft was once a competitor, it’s now a partner.

Canada is one of the fastest growing markets for converged mobile devices, said Moskowitz, and in 2007 they will outpace the sale of handsets. Palm expects 25 per cent growth in Canada over the next five years for converged mobile devices. “We expect this market to accelerate following this launch,” he said.

Faster networks are driving this technology, such as 1xEv-DO. There are also 130 million Microsoft Exchange users around the world, and the Treo 700wx will provides access to all Microsoft applications, including Word, Excel and PowerPoint – with no middleware component involved. Since only 10 per cent of those users access e-mail wirelessly, said Moskowitz, the addressable market is the other 90 per cent of those users.

Canada is seeing some its lowest unemployment rates, as well as a strengthening Canadian dollar and a disproportionate number of employees approaching retirement. The work world is changing, and employees need to access back-end infrastructure on mobile devices, said Phil Sorgen, president of Microsoft Canada.

“It starts with software that is familiar to use,” he said. Microsoft’s mobile platform is also open to OEMs; today, there are more than 18,000 applications available for Mobile 5.0.  Microsoft is also evolving that platform, and this is where a partnership with its former competitor comes in. The two companies, as former rivals, pushed each other to innovate. “We’re still doing it,” said Sorgen, “but in a partnership.”

This changing environment means there will be a lot of losers, said Peter Skillman, senior director of new product development for Palm. Carriers face a significant challenge as they try to amortize networks, he said, and subscriber growth is slowing. Users haven’t taken advantage of their networks, but they haven’t had easy access to those networks. There’s also an incredible learning curve to get users to learn new technology.

“We need to make it accessible so people can get to this,” said Skillman. “Product returns are a significant part of overall business loss incurred because some people just don’t get how to use it.”

Palm’s Butler service is designed to encourage users to call a live person for support. And this, he said, can significantly reduce returns. But there’s still a need to convince carrier partners that this is a good idea, he said, which is why Butler is not available in this region yet. “Driving accessibility promotes data use and carrier revenues,” he said.

The Treo 700wx features Today Screen enhancements, such as the ability to perform a Web search directly from the screen and one-touch dialling with photo speed dials. It also provides the ability to manage a call directly from the screen and check voice-mail with VCR-like icons.

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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